News About Properties

Dolphin Tower’s troubles stack up [South Florida]

Amid the discovery of still more concrete problems at Dolphin Tower, it appears that more money and more time will be needed to repair the damaged 15-story condo building.

Just as vexing to displaced residents, though, are signals that Great American Insurance Co., of Ohio, intends to deny a claim made by Dolphin Tower’s homeowners’ association that would pay for repairs.

Great American, which holds a policy on the 117-unit tower in downtown Sarasota, indicated in a letter to the association earlier this month that a policy claim would not be valid unless the building were to actually fall down.

“One of the defenses, ironically, is that coverage exists only where a building or component actually collapses, rather than being merely at risk of collapse,” said Alan Tannenbaum, a Sarasota attorney representing the association, referring to the letter.

Commercial Real Estate Borrowers Joint the Ranks of Strategic Defaulters

I can understand why the REITs like this–free cash flow! But I can’t understand how it’s a good strategy for the borrowers. Commercial mortgages are a highly leveraged business, and if one of these guys came to me asking for more loans, after he stuck his last banker with his ailing shopping mall, I’d tell them to go . . . well, do something I probably shouldn’t say on a family blog.

Of course, not all of these are what I would call strategic defaults. Just as I think a homeowner should walk away from any mortgage that risks pushing them into insolvency, some of these “strategic defaults” may simply represent owners walking away now and salvaging their capital, instead of being foreclosed upon later after their tenantless rental or shopping mall has eaten up every last bit of cash and they have to shutter the doors. In neither the business nor the individual case does this strike me as reprehensible.

Unit owners’ deaths raise many questions

Q:A senior-citizen couple purchased a unit in our 24-unit condominium in 2004 using a $213,000 mortgage and a very small down payment. In 2005, the husband died. In the period 2006 to 2008, the widow secured a total of $50,000 in home-equity loans (mortgages) on the unit. She died in May of this year. Sarasota County public records show about $170,000 in unpaid mortgages on a property worth about $130,000.

Her heirs came to the unit and cleaned it out to the bare walls. They appear to have walked away from this “underwater” mortgage situation. The July quarterly fee of $860 has not been paid. The bank may or may not even know of the owner’s death.

Do the heirs have any responsibility in this situation? Can they disclaim their inheritance? Should our condo board notify the bank? Should the board file a lien for unpaid fees? How many quarters of unpaid fees will the bank be responsible to pay in a foreclosure action? — A.O., Sarasota

New state law might help reclaim fees [South Florida]

Many community associations throughout Broward have been struggling during the recession after foreclosed homes were left vacant and some financially strapped property owners quit paying their maintenance fees.

Now the state has stepped in to try to help; a new law allows both homeowner’s and condominium associations to deny nonpayers access to clubhouses, pools, fitness rooms and other shared community property. It also stipulates that foreclosing banks now will have to pay a year’s worth of unpaid maintenance bills or 1 percent of the original mortgage debt.

Even more controversial, the state allows associations to demand renters pay the community fees that their landlords aren’t paying, an attorney told a packed Pembroke Pines town hall meeting on Aug. 11.

Homeowner’s and condo associations now can directly bill renters for maintenance fees, with the property owner getting any rent money left over, said Lisa Magill, a partner in the law firm Becker & Poliakoff, which represents many community associations throughout South Florida.

Vacation condo deals not risk-free

I want to buy a vacation condo and rent it out as an investment. What are the pros and cons? I want to start small and buy with cash. Is this the time to do it?

Rock-bottom pricing in many resort areas suggests this is a pretty good time to buy vacation condos. Some South Florida markets have seen 60 percent discounts off 2005 to 2006 condo asking prices.

But — and yes, there’s always one of those in real estate investment — there’s an abundance of sellers coming out of the woodwork now. Couple that with high unemployment rates and it may suggest a stalled recovery and/or that much-feared double-dip recession.

Wellington uses federal grant to help homeowners get keys to foreclosed homes [South Florida]

Despite steep drops in real estate prices and the nation’s recent first-time homebuyer incentives, Danillia Williams never thought she could purchase a place of her own.

That didn’t feel tragic to the 42-year-old single mother, but she certainly thought it would be worthwhile to hunker down permanently in Wellington, where she’s rented a house for years.

A co-worker and the village’s Safe Neighborhoods office led her toward that possibility.

Early this year Wellington joined a national program that gives state and local governments money to buy and fix up abandoned and foreclosed homes, in order to sell them to low- and moderate-income buyers.